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Here we go again

Brian Taylor | 12:26 UK time, Tuesday, 31 March 2009

Here we go again.

Once more, the first minister seeks to respond positively, seeks to salvage what he and others can from the takeover of a Scottish financial institution.

Once more, he is also left questioning whether that deal might have been engineered differently, whether an alternative approach might have maintained HQ functions in Scotland.

If you recall, that was exactly the dual approach pursued by Alex Salmond at the time of the Lloyds takeover of HBOS.

Now it is happening all over again as the Dunfermline Building Society is digested by the Nationwide. Team Salmond is left asking: which nation?

Aides to the first minister stress they do not believe there was a deliberate Treasury attempt to "do down Scotland", to rule out the prospect of a Scottish deal purely on the grounds that it was Scottish.

Rather, they say the choice of the particular rescue mechanism was driven by "rigidity" at the core of the machine.

'Scottish' dimension

They adopted, in short, a takeover model which had previously been used to absorb the Cheshire and Derbyshire building societies.

From the point of view of UK Treasury and FSA officials, the Dunfermline case was entirely comparable.

From that standpoint, the "Scottish" dimension would not compute.

The concern would be to preserve consistency, to bolster the UK's financial structure as far as possible and to forestall the creation of a precedent which might lead others to demand distinctive treatment.

Equally, Mr Salmond's aides are not saying that there was definitely a specific Scottish deal on the table which might have preserved the Dunfermline as an autonomous entity.

However, they believe potential Scottish bargains - such as the one disclosed by BBC Scotland today - were not examined sufficiently closely.

The first minister has asked to see the value for money assessment upon which the Dunfermline takeover was based.

Dual approach

I would not be at all surprised if those various points were to surface in a ministerial statement at Holyrood tomorrow, should MSPs agree.

Again, expect the dual approach: questioning the basis of the deal but pledging to work closely with the Nationwide.

Responding to concerns raised, the prime minister and the chancellor are adamant: that the Dunfermline brought the problems upon themselves and that the Nationwide deal is by far the best for jobs, savers and borrowers.

As ever, dear friends, my only concern is to place the facts and analysis before you in, one hopes, a cogent form.

All the facts. All the analysis.


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